A spokesperson for the California DMV said the agency recently met with Tesla, but the company has yet to apply for a permit for driverless testing or deployment.

The permit does not allow the company to run vehicles autonomously, the California Public Utilities Commission said.

"They've got to show progress, and that's what we didn't get," Gene Munster, a managing partner of Deepwater Asset Management who writes about Tesla and Alphabet, told Business Insider.

Musk told analysts that the service will be available to probably “half of the population of the U.S. by the end of the year — that’s at least our goal, subject to regulatory approvals.”

Many prospective buyers have been turned off by Musk’s foray into right-wing politics, and the competition has ramped up in key markets such as Europe and China.